GMS had been a tenant at 360 North Michigan Avenue for over eleven years and had a good relationship with its landlord. However, [...]]]>

Chicago, IL – November 11, 2011 – Chicago-based event managing service Global Management Services, Inc (GMS) recently signed a long-term lease for new office space at One North LaSalle Street in Chicago.

GMS had been a tenant at 360 North Michigan Avenue for over eleven years and had a good relationship with its landlord. However, their space was in need of updating and required modifications to continue to meet their growing operational needs. With the assistance of Bella Terra Partners, a commercial tenant representation firm, GMS was able to move into a sister building of 360 N Michigan Avenue, One North LaSalle Street, owned by the same landlord. “The space offered at One North LaSalle Street had perfect existing conditions, was double the size and included furniture that would become vacant at exactly the time GMS required this space.” said Rhea Campbell, Founding Partner of Bella Terra Partners who represented GMS. “Not only that, the negotiated transaction fit well with GMS’s business goals and was a shorter negotiation process because of the long term relationship of the tenant and the landlord. The landlord gets to keep a solid business in its portfolio of Chicago owned assets and the tenant gets almost brand new space for a fraction of the cost with no out of pocket exposure. It’s a win for both parties.” stated Campbell.

GMS provides event management services throughout the United States, Canada and the rest of the world. Local services they provide include: flight bookings, venue selections, transportation, multilingual guides and interpreters, fine dining, hotel arrangements and unique entertainment. And, they have international representatives in Benelux, Germany, Italy and the UK.

]]>http://bellaterrapartners.com/squarefeet/?p=556Investment Property Databank Signs a Lease for New Space in Chicagohttp://feedproxy.google.com/~r/http/bellaterrapartnerscom/squarefeet/~3/x0ksfkJ-d7E/
Tue, 06 Dec 2011 18:25:51 +0000http://bellaterrapartners.com/squarefeet/?p=564Chicago, IL – November 11, 2011 – United Kingdom-based real estate performance analysis firm Investment Property Databank US (IPD) recently signed a new lease for office space at The Civic Opera Building in Chicago.

IPD opened its first Chicago office in 2007 in River North, but quickly outgrew that space. Additionally, IPD was looking to [...]]]>

Chicago, IL – November 11, 2011 – United Kingdom-based real estate performance analysis firm Investment Property Databank US (IPD) recently signed a new lease for office space at The Civic Opera Building in Chicago.

IPD opened its first Chicago office in 2007 in River North, but quickly outgrew that space. Additionally, IPD was looking to upgrade its office and building aesthetic to create a more professional environment in close proximity to the Metra trains, L lines and its institutional customer base. “Tishman Speyer, the landlord at 20 N Wacker, was very accommodating, offering a compelling economic package to attract IPD to the already built out space on the 17th floor. This coupled with the amenities of the Tower Club, the presence, history and professional aesthetic of the Civic and the proximity to transportation, it was a simple choice,” said Rhea Campbell of Bella Terra Partners, who negotiated this transaction on behalf of IPD.

IPD is at the forefront of global real estate performance analysis, providing accurate and comprehensive information to measure real estate market returns and to take advantage of emerging trends. IPD has a multi-national staff of 300 and a presence in 20 countries through subsidiaries and existing trade associations.

Our business has been steadily growing over the past three years. Because of this we’ve found ourselves needing to hire additional staff members, develop new vendor relationships for graphic design work, accounting, corporate structure evaluation and human resource advice and coaching. In our search for new vendors, we’ve found both [...]]]>

Our business has been steadily growing over the past three years. Because of this we’ve found ourselves needing to hire additional staff members, develop new vendor relationships for graphic design work, accounting, corporate structure evaluation and human resource advice and coaching. In our search for new vendors, we’ve found both large and small service providers and have found the differences between them startling.

The value we’ve found we can expect for our dollars spent, the level of service provided, and the ability to customize solutions and think clearly and creatively didn’t correlate with vendor size. In fact, our experience has been that bigger is not at all better, but often worse.

When a company aggressively pursues expansion, more often than not the quality of their product or service will suffer if they are focused on the bottom line only. Take Toyota, for instance. While the car maker is known for their quality vehicles, there have been numerous problems that have developed in their vehicles in the last few years. CEO Akio Toyoda himself admitted,

“Toyota’s priority has traditionally been the following: first, safety; second, quality; and third, volume. … These became confused.”

They had allowed their pursuit of volume and revenue to supersede their commitment to quality.

“The decision to grow is often accompanied by a series of decisions to accept slightly lower levels of quality, whether it is for facilities modifications to suit different real estate requirements or ingredient changes to sign on a new distributor,”

In commercial real estate, many of the so-called large national firms are also allowing revenue and expansion goals to supersede their commitment to quality. This is particularly true of the large, corporate owned firms that have multiple lines of business spread over multiple service sectors. In the midst of an unpredictable market, these firms have high fixed costs, cumbersome reporting structures, rogue employees without much supervision, and a myopic focus on the bottom line that sacrifices the client experience and therefore the service outcome. In order to succeed at a national level, these organizations have multiple lease obligations, high labor costs, layers of shared services, marketing expenses at the local, regional and national levels, and excessively high IT costs. As a result, their constant need for investment capital requires them to be focused on short-term financial objectives instead of producing long-term value for their clients.

A smaller, more entrepreneurial-minded firm, on the other hand, can foster innovation, creativity, and offer a better quality of service to its clients. Because it has lower fixed costs, it can turn a profit more readily even in mixed economic conditions and with a smaller client base. As a result, these kinds of firms can be more flexible, switch gears quickly in a changing environment, and make their primary focus the delivery of results for their clients.

While large commercial real estate business models may look dominant at first glance, many of them are cannibalizing themselves. When all the dust settles, it will be the well-run franchisors and networks with the consistent ability to generate profits and scale regardless of the economy that will prove to have the better business model.

]]>http://bellaterrapartners.com/squarefeet/?p=498Do You Know How Big Your Piece of The Pie Should Be?http://feedproxy.google.com/~r/http/bellaterrapartnerscom/squarefeet/~3/LMUp7fh8Okw/
Tue, 31 May 2011 15:24:29 +0000http://bellaterrapartners.com/squarefeet/?p=485

Research by George Wu, a professor of behavioral science at the University of Chicago Graduate School of Business, indicates even skilled negotiators may have underestimated the amount that it was possible to gain in a negotiation.

He states,

When two people are negotiating over an issue such as price or salary, the amounts that [...]]]>

Research by George Wu, a professor of behavioral science at the University of Chicago Graduate School of Business, indicates even skilled negotiators may have underestimated the amount that it was possible to gain in a negotiation.

He states,

When two people are negotiating over an issue such as price or salary, the amounts that each person is willing to give or take (i.e., their bottom lines) determine the range of possible settlements, commonly called the “bargaining zone” or “pie.” Put differently, the pie is the total value available for negotiators to split, and is defined by the size of the bargaining zone—the difference between the maximum amount that one person (e.g., a buyer) is willing to give and the minimum amount the other person is willing to take (e.g., a seller). There will only be an acceptable deal if one person is willing to pay as much as the other person needs. However, most savvy negotiators will not tell their counterpart how much they would really be willing to pay or accept. While each person might have ways of developing informed guesses about the other’s situation, perfectly accurate guesses are hard to come by, and mistakes are inevitable.

Be sure you get your fair share.

]]>http://bellaterrapartners.com/squarefeet/?p=485When it comes to your office space, is it really best to just “stay put”?http://feedproxy.google.com/~r/http/bellaterrapartnerscom/squarefeet/~3/xO3Zo7zyDeE/
Tue, 24 May 2011 21:15:02 +0000http://bellaterrapartners.com/squarefeet/?p=424In the last few years we’ve helped our clients renew their office leases more often than we’ve helped them acquire new office leases. Why, you ask? Some of our clients have thought it too risky to move to another location and commit to a longer lease, complete a full interior build out, and interrupt their [...]]]>In the last few years we’ve helped our clients renew their office leases more often than we’ve helped them acquire new office leases. Why, you ask? Some of our clients have thought it too risky to move to another location and commit to a longer lease, complete a full interior build out, and interrupt their business operations; others have simply opted for the path of least resistance at a time of great uncertainty about the future. Some have found themselves with reduced credit capacity, which has made acquiring new office space and posting a Letter of Credit difficult or impossible. Others have simply not had the mental capacity or human capital to think long term about their business, brand, and talent needs.

But, it’s easy.

The landlord has made these types of transactions relatively easy and attractive to these tenants by crafting, in partnership with the tenant’s professional, “blend and extend” solutions. “Blend and extend,” as it’s known in the office leasing market, is the name given to the process by which a landlord renews a tenant with unexpired term on their lease by blending the unexpired term with the new term. The tenant is happy because they don’t have to go through the process of a new office search, a lease negotiation, and a move. The landlord is happy because there is no downtime, no marketing effort, and no exposure or risk if the landlord is trying to refinance their building or market it for sale. It’s easy and both tenants and landlords like easy.

There is more to it.

Regardless of what a tenant thinks is the best scenario–stay put or move–both options, renewing or relocating, must be evaluated side-by-side in a transparent way. The ability for a tenant to rethink their office layout and workflow or working adjacencies often allows efficiencies to be gained that can trump the initial economic offering or improve the landlord’s economic offer through a reduced footprint. Not to mention the not-so-obvious benefits that can be associated with moving, such as rebranding, creating a more convenient location for a specific sector or talent a business is trying to acquire, and energizing the team. Repeatedly, we’ve seen final deal structures of one building, deemed too expensive at the outset of the search, come out the winning option at the end of the process because of the tenant’s ability to take less space in one building than they would take in their existing space. With a renewed sense of hope in the economy, many of our clients are not only looking for good economic value in their leasehold, but also are beginning to look at how their office space will support their future growth, energize their brand, reposition them in the market place and/or allow them to capture market share or talent from competitors in a weakened condition. In other words, tenants are beginning to come out from under the “recession rock” and plan for future growth and market position of their organization.

I can’t be bothered.

Some may argue that moving is a hassle. It takes some extra time and effort, and your current landlord may be willing to give you, what looks like on the surface, an appealing deal if you stay in place with them. However, with the right professional helping you sort through the myriad options available and assisting you to identify, interview, and select vendors to complete most of the heavy lifting, the process–whether you opt for a move or stay in place end game–should be easy and seamless. Moving offices may not be the best option for every company but certainly needs to be one of the options considered by your real estate professional regardless of whether your initial reaction is simply to stay in place.

My best advice?

Use your real estate professional to prepare and evaluate all scenarios in a transparent and easy-to-digest method. Consider not only the high-level economics of each scenario but also space adjacencies, technology, and furniture costs, access to new talent, the ability to retain current talent, your brand and image, and how each scenario contributes to energizing your operations and assisting you to reach your quantitative, qualitative and operational goals. Figuring out which scenario is best for your company in the coming years does not mean finding which is the easiest path to take. In the long run, operational productivity will earn you more profit than saving a few dollars on your lease or providing you an easier up-front process.

So, go ahead and take control of your company’s real estate. When leveraged correctly, it can be a substantial aid to your company’s success.

Sublease vacancy decreased to 2,511,330 available rsf from 2,658,482 available rsf

Many companies have excess, underutilized space. The bulk of this ‘shadow space‘ must be absorbed before a healthy market returns

Issues impacting Chicago office space, and many other markets, include: high unemployment, housing foreclosures and weak pricing, stagnant economic growth and diminished financial reserves of the small business.

We expect the recovery to move slowly for commercial office space in Chicago.

A new, 1 million rsf office tower may be coming to the downtown market in 2014. In November 2010, Trammell Crow and Insite Real Estate announced their plans to construct the tower at 301 S Wacker Drive. Alter Group and White Parks Realty are also eyeing 625 W Adams as a site for a 490,000 rsf office tower. Finally, Fifield and CBRE are alleged to be planning a 350,000 to 425,000 rsf office tower at 601 W Monroe.

Where is the opportunity?

There is a lack of A+ prime -view, high-rise space. What little there is will not be discounted as much as tenants would like to see. However, great opportunities continue to exist in the B and B+ building segment. Landlords under pressure are looking to minimize the negative market forces by packaging creative deal structures.

]]>http://bellaterrapartners.com/squarefeet/?p=372Telecommuting, the Up and Coming Workplace Strategyhttp://feedproxy.google.com/~r/http/bellaterrapartnerscom/squarefeet/~3/EsllKB94HUw/
Tue, 10 May 2011 15:36:43 +0000http://bellaterrapartners.com/squarefeet/?p=346In their article, Workshifting Benefits: The Bottom Line, The Telework Research Network gave compelling statistics about the benefits of employee telecommuting. Telecommuting is a relatively new trend in business that allows employees to work from home, part to full-time. With the current resources available through technology, it is likely feasible for 40% of the workforce [...]]]>In their article, Workshifting Benefits: The Bottom Line, The Telework Research Network gave compelling statistics about the benefits of employee telecommuting. Telecommuting is a relatively new trend in business that allows employees to work from home, part to full-time. With the current resources available through technology, it is likely feasible for 40% of the workforce and has benefits for the employer, employee and the community. For the employer, more telecommuting employees means reduced real estate costs, turnover and higher productivity. Telecommuting employees themselves will reap benefits such as saving money on gas, work related expenses and gaining back the time they used to spend commuting. And, the overall community can benefit by the reduction of the overall use of oil, greenhouse gases, car accidents and highway maintenance.

Telecommuting or Alternative Workplace Strategy should be a consideration when conducting a facility needs analysis. Often times companies can achieve significant real estate cost savings by carefully evaluating whether adopting this strategy is something that works for their culture or workflows.